Sh696m payout for Kakuzi rights violation victims

The parent company of Kakuzi #ticker:KUKZ, Camellia Plc, has paid Sh696 million to settle claims of alleged human rights abuses perpetrated by employees in its Kenyan agricultural operation.

The amount includes payouts to victims of alleged violence and rape as well as remedial investments in the local community in Murang’a County where Kakuzi runs its agricultural business.

The multinational also paid Sh348 million to settle similar allegations brought against its Malawian subsidiary, Eastern Produce Malawi (EPM), raising its total spend on the human rights row to Sh1 billion.

“These claims have now been resolved at settlements costing up to £4.6 million (Sh696 million) in relation to the Kenyan claims, and £2.3 million (Sh348 million) in relation to the Malawian claims,” Kent-based Camellia said in a trading update.

The settlement, the multinational added, clears the path for investigations into the allegations and prosecution of any individual offenders found culpable.

UK law firm Leigh Day had initially filed rights abuse claims against Kakuzi in the High Court in London but the assertions were dropped, with the litigation going ahead against Camellia and its subsidiaries Linton Park Plc and Robertson Bois Dickson Anderson Limited.

“The companies announce that an innovative and mutually beneficial resolution of all the claims has been reached, without any admission of liability by the companies or by Kakuzi,” Camellia said.

As part of the deal, Leigh Day has agreed not to bring or support any further claims against any part of the Camellia Group in connection with their operations in Kenya, “for a substantial period.”

The multinational decided to settle to limit its exposure in the dispute. It had already spent more than Sh500 million in legal fees which it said would be difficult to recover from the petitioners even if it won the case.

Leigh Day took up the case on a no-win no-fee basis.

“EPM and the companies also know that even if they had successfully defended these claims all the way to trial they would not have been able to recover their legal expenses from the claimants,” Camellia said.

The human rights row triggered a major fallout which saw UK supermarkets Tesco, Sainsbury’s and Lidl suspend purchase of avocados from Kakuzi in October last year when the issue was reported by The Times of London.

It was not immediately clear whether Kakuzi has been reinstated as a supplier to the major retailers.

“The settlement is intended not only to resolve the claims themselves, but also to help Kakuzi to strengthen its relations with the local communities and to continue to support the thousands of smallholder farmers who rely on Kakuzi to get their avocados to market,” Camellia said.

The alleged abuses were carried out by employees of Kakuzi and EPM, including security guards.

Camellia owns a 50.7 percent stake in Kakuzi, giving it control of the company.

“Although not party to the litigation or the settlement, Kakuzi has confirmed that it will be putting in place certain measures, for the benefit of the communities on and around its farm,” the multinational said.

The measures include funding of charcoal kilns and access to firewood, building two social centres for community meetings, and employing predominantly female safety marshalls on Kakuzi’s farm “to give visible reassurance to those using access routes and particularly women.”

Access to local amenities

Kakuzi will also build three new roads accessible to the community without any requirement to obtain a licence to give people better access to local amenities.

The company will establish a technical working group to survey and demarcate land which has been previously donated by Kakuzi and design and implement a human rights defenders’ policy.

“The cost (over three years) of these projects, together with payments for the individual claimants and a contribution to their legal fees will be up to a sum of £4.6 million (Sh696 million),” Camellia said.

The measures will build on governance reforms launched by Kakuzi last year as the legal battle was heating up.

The agricultural firm in November appointed its second-largest shareholder, John Kibunga Kimani, as its non-executive director after denying him a board seat for years.

Dr Kimani has strong credibility among the community in Murang’a given his squatter background and his philanthropic efforts, including funding education of poor students.

He was raised on Kakuzi’s farms as a squatter but has since amassed a 32.2 percent stake in the company worth Sh2.3 billion, among other investments.

The agricultural firm also appointed Nicholas Ng’ang’a, a long-time non-executive director, as its chairman to replace Graham Mclean.

Mr Mclean, an executive of Camellia, remains on the board of the company.

Kakuzi also created a new board committee to focus on human rights issues. The committee comprises distinguished individuals drawn from the local and international human rights sector.

The company’s alternative dispute resolution process is being scaled up to address the community’s grievances quickly and ensure action is taken to deal with employees who flout the company’s ethical standards.